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73rd Year - No. 286 Good Morning! It's Wednesday, August 19. 1981 7 Sections - 54 Pages - 25 Cents
U. S. contractors building fewer homes
From staff and wire reports
Although the number of housing starts
across the country rose slightly in July from
the month before, contractors are building
fewer homes both nationally and locally than
a year ago.
The U. S. Department of Commerce report-ed
Tuesday that seasonally adjusted housing
construction increased 3.3 percent in July,
the first increase since January.
Department of Commerce analysts called
their indicated increase " borderline" at
best, in part because their margin of error
was 5 percent
Local housing starts, measured by the
number of building permits issued, stand
slightly below last year's levels.
In the first seven months of 1981, the city of
Columbia issued 52 permits for single- famil- y
homes, a drop from 66 for the same period
last year. The county issued 101 permits,
eight less than last year.
In July, the county issued 14 permits, half
the number of a year ago. Columbia issued
nine permits, four less than last year.
In a separate report, the government said
the personal income of Americans climbed
in July more than it has in a year by 1.6
percent.
Almost half of the gain reflected a once- a- ye- ar
cost of living increase which shows up
in July Social Security checks, rattier than
any large expansion in wages and salaries.
This year, the Social Security hike was 11.2
percent.
Regardless of the source, retailers expect
much of the additional money to show up at
their cash registers.
Federation of Independent Business econo-mist
William Dunkelberg said that from his
perspective, the economy has nowhere to go
but up. " No sector is set for a real down," he
said. " Housing can't get much lower ... and
the consumer is in a good position."
There were 1,055,000 housing starts ( sea-sonally
adjusted), 17 percent below the num-ber
for July last year.
Michael Sumichrast, chief economist for
the industry group, the National Association
of Homebuilders, said that actually is the lat-est
in a 32- mo- nth string of construction de-clines,
despite the government's figure.
" You're getting down to below a million
units ( a year) in the next couple of months
and you won't get out of it for the rest of the
year," he said. " That's a depressed rate."
Association President Herman Smith said
from his Fort Worth, Texas, office: " Unless
interest rates drop soon, this is going to be
the worst year far housing production and
home sales since 1946. ' '
Commerce Department figures, neverthe-less,
show that for the first seven months of
the year, housing starts are 5.9 percent
ahead of the same period last year despite
the high interest rates that have plagued
both builders and buyers.
Personal income for July rose by $ 37 bil-lion,
figured on an annual rate after seasonal
adjustment. It was more than twice June's
increase.
" Even if we take out the increase in trans-fer
payments, personal income has contin-ued
to stay at least constant in real terms
over the past few months on average," said
Dave Ernst, a private economist with Evans
Economics. Consumers, he said, " won't stop
buying."
Even without the hefty increase attributed
directly to the cost- of- livi- ng hikes for Social
Security and some other government pay-ments,
the monthly growth in personal in-come
would still have been greater than
June's figure.
Disposable ( take- hom- e) personal income
in July climbed to $ 8,826 per capita in July,
$ 131 more than in June.
Going dowia
Part of a three- stor- y parking garage collapsed
in Houston Tuesday, and cars went tumbling
into the rubble below. Firefighters said at least
UPl toieptioto
20 cars were damaged or destroyed in the col-lapse,
but there were no signs of human cas-ualties.
It occurred during the lunch hour.
Home mortgage market
collapses in Columbia
ByKenVanKirk
Missourian staff writer
Mortgage financing in Columbia,
which has been scarce for months,
now has virtually disappeared
Tight monetary policy on the part
of the Federal Reserve Board and a
flow of money from savings ac-counts
into investment have forced
area banks and savings and loans
out of the home loan business. Auto
financing and other types of consum-er
loans are still available, though at
high interest rates.
" Rather than charge a 22 percent
mortgage rate, I would just as soon
tell borrowers that I don't have the
money, because I really don't," said
Don Singleton, president of Boone
National Savings and Loan. " I'm
just finishing up my commitments
and that's it."
Dan Scotten, president of Com-merce
Bank of Columbia, says his
bank is still offering construction
loans, but only to long- establish- ed
customers. And the only financing
available to' those customers is
sbort- ten- n " balloon" financing
loans that must be paid off or re-viewed
at the end of their term.
The Federal Reserve's ever- tighteni- ng
purse strings are a major rea-son
for the scarcity and price of
mortgage money. The Federal Re-serve
is trying to combat inflation by
holding down growth in the nation's
money supply. But tight money
leads to high interest rates.
And higher interest rates charged
to borrowing banks can only lead to
one thing: higher mortgage rates for
homebuyers.
Scotten and Singleton don't think
the credit market will loosen up be-fore
the first of the year, and agree it
could be as late as mid- 198- 2 before
any significant change will be felt.
" I don't see rates dropping in the
short term, and, unfortunately, I
don't think things will change before
the end of the year," Scotten said.
" It's a sad dilemma we're in."
One contributor to the dilemma is
an outflow of savings from the banks
and savings and loans into more
profitable markets.
Nationwide, S& Ls alone are ex-pected
to lose $ 5 billion to $ 6 billion
this year, and a considerable portion
of that money has been absorbed by
brokerage and other investment
firms.
William Bayer of Columbia's New- har- d,
Cook and Co. characterizes the
shift from consuming to investment
as an overall change in the lender- borrow- er
relationship.
" For the first time in my lifetime,
things are coming back to a true
market situation," Bayer said. " Just
how long it can stay this way I don't
know."
People who realize they are losing
money with relatively low interest
rates at traditional savings institu-tions
are switching to higher- yieldin- g
stocks and money market certifi-cates,
he said.
But Thomas Baumgardner of Ed-ward
D. Jones and Co. resents the
accusation that his brokerage firm is
feeding on other financial institu-tions'
problems.
" To say that money is flowing out
of savings and into investment is an
unsubstantiated statement," he
says. " But we're so highly visible
that it's an easy statement to
make."
The fact remains that there is very
little mortgage money available
through Columbia's banks and sav-ings
and loan associations.
Boone County Bank dropped out of
the real estate lending market at the
beginning of the summer. St. Louis
Federal Savings and Loan's Colum-bia
branch also has temporarily sus-pended
construction and conventio-nal
mortgage lending. First National
Bank is not making construction
loans. All expect to resume construc-tion
and mortgage lending when in-terest
rates come down and more
money becomes available.
Farm and Home Savings and
Loan, Missouri's largest, is still tak-ing
FHA and VA loan applications,
but is finding few borrowers who
qualify because of restrictive stan-dards,
says Ken Engelbrecht of
Farm and Home's Columbia branch.
First Bank of Commerce is still
making construction and home
loans. The interest rate being quoted
is 20 to 22 percent on home loans, or
about one point above the current
ao percent prime rate.
Optimistic bankers, builders, real
estate agents and economists are
saying that the Economic Recovery
Tax Act signed by President Reagan
last Thursday could provide the
spark financial institutions and the
bousing industry desperately need.
" The tax break might do us some
good," Singleton said. " And if it
does, certainly it will be good for
housing, because that's the business
we're in."
The main way the tax bill could
benefit S& Ls and housing, he says, is
by providing new incentives for capi-tal
improvements in business. That
could provide the stabilizing element
the economy needs. Singleton says.
And the tax bill allows banks,
thrifts and credit unions to issue spe-cial
" All Savers" certificates that
pay 70 percent of the yield on one- ye- ar
Treasury bills. The certificates,
available for 15 months starting Oct.
1, would allow savers to earn up to
( See CERTIFICATES, Page 16A)
College of Agriculture to eliminate 50 positions
ByYouyuanliu
Missourian staff writer
To meet its $ 1 million budget re-duction,
the Agricultural Experi-ment
Station of the University Col-lege
of Agriculture will eliminate 50
to 55 positions and cut programs by
10 percent
The positions that probably will be
eliminated, according to Dean Max
Lennon, include' those of research
associates, technicians and assist-ants.
Even so, said Lennon, the target
budget is still not fully met. Addi-tional
reductions will be necessary,
including not filling vacant graduate
student assistantships and cutback
of feed production and livestock
herds.
Since agriculture is Missouri's
largest industry, and the farmers in
the state rely heavily on the college,
the impact of the cut will be felt
statewide, Lennon said.
" The farmers will undoubtedly
suffer, because we'll have to reduce
not only programs on the campus
but also at outlying centers," he
said.
Associate Dean William Pfander
said the college already is not re-sponding
to the needs of all farmers.
Insight
For example, he said, there are rice
and pecan growers in this state, but
the college has not done any re-search
on those crops.
A substantially reduced budget
will make the situation worse,
Pfander said. With research pro-grams
cut and personnel reduced,
" We are not going to be able even to
respond to some of the needs we are
now responding to."
Pfander said he expects a lot of
people to say " the University doesn't
do anything for me" and turn to oth-er
places for help.
The farmers have a system to col-lect
money to support research at
the college. But Pfander warns, " If
we have no people here to do the
work, they will go to Iowa, Kansas,
Arkansas or Illinois to get the work
done."
The potential impact of the cuts on
the state is difficult to evaluate accu-rately
at present, but not hard to
imagine. Pfander gave an example:
" We have a plant- breedi- ng project
that develops a new variety of wheat
which will out- yie- ld the existing va-rieties
by five bushels per acre. If
farmers plant 2 million acres
( 800,000 hectares) of the new variety
and get five bushels more per acre,
four dollars per bushel and assum-ing
an economic multiplier of three,
the impact of not doing this research
is $ 120 million per year."
The college's Agricultural Exten-sion
Service, which has an office in
each of the 114 Missouri counties,
faces a $ 200,000 budget reduction. Of
this, $ 142,333 will come from salary
and wages, said Thomas Brown, in-terim
dean for Extension and direc-tor
of the Agricultural Extension
Program.
To meet the reductions, Brown
said, " We simply are going to have
to eliminate six to seven positions."
In the short run he will not fill the
vacant positions left open by retire-ments
or by people who have re-signed
to take better- payin- g jobs
elsewhere.
But he added that these positions
are important and some of them
must be filled.
One such position is for a person to
work with small farmers; the Uni-versity
has the best program in the
nation in this area. Another position
is in soil and water conservation, a
( See BUDGET, Page 16A)
City weighs summer jobs plan
for disadvantaged " feenagers
By Jeff Baron
Mfcsouriaa staff writer
With federal and state govern-ments
cutting back on similar pro-grams,
the City Council may put
teenagers from low- inco- me families
in a summer employment program.
That was the major change the
council considered as it began re-viewing
the proposed city budget for
fiscal 1982 Tuesday night. Most coun-cil
members said they like the pro-posal,
which could take approxi-mately
$ 168,000 from the city's
surplus accounts to employ 150
youths, 15 supervisors and four coun-selors.
The council also reached a consen-sus
in support of a $ 10,000 Police De-partment
slush fund to pay infor-mants
and run undercover " sting"
operations. Police Chief David
Walsh said the department now
draws money from its narcotics in-vestigations
fund for those purposes.
The summer youth employment
program was the suggestion of City
4
Manager Richard Gray. He said the
proposal arose from a conference
with social service agency heads. " I
don't know where you could spend
this money better than stepping in
and helping these youths," Gray
said.
Under Gray's proposal, 150 youths
15 to 18 would work about 20 hours a
week for the city on maintenance
projects, and would spend another 10
hours learning about " job skills and
the work ethic." They would earn
$ 2.50 an hour and be supervised by 15
full- tim- e workers.
In addition, Gray recommended
hiring four " street counselors" to
spend six evenings a week meeting
teenagers and talking with them
wherever they spend time.
Gray said the size of the program
would be up to the council, and he
suggested 150 teenagers only as an
example.
If the council agrees to pay for the
program, Gray promised the city
will get the cooperation of the public
schools and social service agencies
to set it up. Wynna Elbert, the city's
director of youth services, would be
in charge of the project, Gray said.
The program is necessary " to help
fffl the void left by the retrenchment
of federal and state programs"
aimed at introducing low- inco- me
youths to the working world, Gray
said. He said it also could forestall
" a long hot summer next summer."
While council members gave some .
support to the idea of the youth em-ployment
program, they were more
enthusiastic about making it easier
for police to draw money to pay for
information.
Chief Walsh said the department
now has a $ 20,000 annual budget for
narcotics operations, but it also
draws from that account to try inno-vative
programs and to pay off infor-mants.
With more money, he said,
police could be more creative and
could run more undercover opera-tions.
Money for informants is not read-ily
available now, Walsh said.
Ira town
today
11: 39 ajn. Columbia Conven-tion
and Visitors Bureau meet-ing,
Hilton Inn, Stadium
Boulevard and Interstate 70.
Inside today
Hart transplant
Jim Hart is starting his 16th
season as quarterback for the
St. Louis Cardinals. He's had a
bright career but not bright
enough for hometown fans.
The 37- year-- old player will
have to do something special
to make those fans happy this
year. See story, page 10A.
Index
Business ........... 15A
Classified. 1- 4- C
Opinion 4A
Sports..... M.............. 10- ll- A
Theater ...... 13A
Weather 2A
Reagan believes deficit
will stay below 982 goal
LOS ANGELES ( UPI) Presi-dent
Reagan acknowledged Tuesday
he is having " budget problems" for
the coming fiscal year, but insisted
he will hold the 1382 deficit to the $ 42
billion consistently projected by his
administration.
The president met for nearly three
hours with top budget advisers,
mainly to discuss the defense bud-get.
Chief White House spokeman Da-vid
Gergen conceded there were " se-rious
threats" to the administra-tion's
1982 deficit goal. But Reagan
appeared to be more confident that
his administration can hold the line.
White House deputy press secre-tary
Larry Speakes reported that
budget director David Stockman told
Reagan during the meeting, " As far
as ' 82 is concerned, we're firmly on
target."
The president was asked during a
brief photo- takin- g session in his Los
Angeles hotel whether he is having
trouble keeping the 1982 deficit in the
$ 40 billion range.
" No we're not," Reagan said.
" Dave ( Stockman) tells me it's $ 42
V
billion."
Pressed as to whether his adminis-tration
is having problems fighting
the budget battle, Reagan said,
" You always have budget problems.
We've been having them for six
months."
But the president said he would
not try to save money by cutting sig-nificant
defense projects.
Reagan first called in Defense Sec-retary
Caspar Weinberger to look at
Pentagon spending long viewed as
the least likely place for cuts.
Also there were Secretary of State
Alexander Haig, Treasury Secretary
Donald Regan, Budget Director Da-vid
Stockman and Murray Weiden- bau- m,
chairman of the Council of
Economic Advisers.
Pentagon spokesman Henry Catto
said in Washington that Weinberger
strongly opposes any cuts in defense
spending.
There have been continuing re-ports
in the newspapers that the ad-ministration
faces a deficit in 192
that could run as high as $ 20 billion
above the $ 40 bfllion or $ 42 billion fig-ure
the president wants.
4

73rd Year - No. 286 Good Morning! It's Wednesday, August 19. 1981 7 Sections - 54 Pages - 25 Cents
U. S. contractors building fewer homes
From staff and wire reports
Although the number of housing starts
across the country rose slightly in July from
the month before, contractors are building
fewer homes both nationally and locally than
a year ago.
The U. S. Department of Commerce report-ed
Tuesday that seasonally adjusted housing
construction increased 3.3 percent in July,
the first increase since January.
Department of Commerce analysts called
their indicated increase " borderline" at
best, in part because their margin of error
was 5 percent
Local housing starts, measured by the
number of building permits issued, stand
slightly below last year's levels.
In the first seven months of 1981, the city of
Columbia issued 52 permits for single- famil- y
homes, a drop from 66 for the same period
last year. The county issued 101 permits,
eight less than last year.
In July, the county issued 14 permits, half
the number of a year ago. Columbia issued
nine permits, four less than last year.
In a separate report, the government said
the personal income of Americans climbed
in July more than it has in a year by 1.6
percent.
Almost half of the gain reflected a once- a- ye- ar
cost of living increase which shows up
in July Social Security checks, rattier than
any large expansion in wages and salaries.
This year, the Social Security hike was 11.2
percent.
Regardless of the source, retailers expect
much of the additional money to show up at
their cash registers.
Federation of Independent Business econo-mist
William Dunkelberg said that from his
perspective, the economy has nowhere to go
but up. " No sector is set for a real down," he
said. " Housing can't get much lower ... and
the consumer is in a good position."
There were 1,055,000 housing starts ( sea-sonally
adjusted), 17 percent below the num-ber
for July last year.
Michael Sumichrast, chief economist for
the industry group, the National Association
of Homebuilders, said that actually is the lat-est
in a 32- mo- nth string of construction de-clines,
despite the government's figure.
" You're getting down to below a million
units ( a year) in the next couple of months
and you won't get out of it for the rest of the
year," he said. " That's a depressed rate."
Association President Herman Smith said
from his Fort Worth, Texas, office: " Unless
interest rates drop soon, this is going to be
the worst year far housing production and
home sales since 1946. ' '
Commerce Department figures, neverthe-less,
show that for the first seven months of
the year, housing starts are 5.9 percent
ahead of the same period last year despite
the high interest rates that have plagued
both builders and buyers.
Personal income for July rose by $ 37 bil-lion,
figured on an annual rate after seasonal
adjustment. It was more than twice June's
increase.
" Even if we take out the increase in trans-fer
payments, personal income has contin-ued
to stay at least constant in real terms
over the past few months on average," said
Dave Ernst, a private economist with Evans
Economics. Consumers, he said, " won't stop
buying."
Even without the hefty increase attributed
directly to the cost- of- livi- ng hikes for Social
Security and some other government pay-ments,
the monthly growth in personal in-come
would still have been greater than
June's figure.
Disposable ( take- hom- e) personal income
in July climbed to $ 8,826 per capita in July,
$ 131 more than in June.
Going dowia
Part of a three- stor- y parking garage collapsed
in Houston Tuesday, and cars went tumbling
into the rubble below. Firefighters said at least
UPl toieptioto
20 cars were damaged or destroyed in the col-lapse,
but there were no signs of human cas-ualties.
It occurred during the lunch hour.
Home mortgage market
collapses in Columbia
ByKenVanKirk
Missourian staff writer
Mortgage financing in Columbia,
which has been scarce for months,
now has virtually disappeared
Tight monetary policy on the part
of the Federal Reserve Board and a
flow of money from savings ac-counts
into investment have forced
area banks and savings and loans
out of the home loan business. Auto
financing and other types of consum-er
loans are still available, though at
high interest rates.
" Rather than charge a 22 percent
mortgage rate, I would just as soon
tell borrowers that I don't have the
money, because I really don't," said
Don Singleton, president of Boone
National Savings and Loan. " I'm
just finishing up my commitments
and that's it."
Dan Scotten, president of Com-merce
Bank of Columbia, says his
bank is still offering construction
loans, but only to long- establish- ed
customers. And the only financing
available to' those customers is
sbort- ten- n " balloon" financing
loans that must be paid off or re-viewed
at the end of their term.
The Federal Reserve's ever- tighteni- ng
purse strings are a major rea-son
for the scarcity and price of
mortgage money. The Federal Re-serve
is trying to combat inflation by
holding down growth in the nation's
money supply. But tight money
leads to high interest rates.
And higher interest rates charged
to borrowing banks can only lead to
one thing: higher mortgage rates for
homebuyers.
Scotten and Singleton don't think
the credit market will loosen up be-fore
the first of the year, and agree it
could be as late as mid- 198- 2 before
any significant change will be felt.
" I don't see rates dropping in the
short term, and, unfortunately, I
don't think things will change before
the end of the year," Scotten said.
" It's a sad dilemma we're in."
One contributor to the dilemma is
an outflow of savings from the banks
and savings and loans into more
profitable markets.
Nationwide, S& Ls alone are ex-pected
to lose $ 5 billion to $ 6 billion
this year, and a considerable portion
of that money has been absorbed by
brokerage and other investment
firms.
William Bayer of Columbia's New- har- d,
Cook and Co. characterizes the
shift from consuming to investment
as an overall change in the lender- borrow- er
relationship.
" For the first time in my lifetime,
things are coming back to a true
market situation," Bayer said. " Just
how long it can stay this way I don't
know."
People who realize they are losing
money with relatively low interest
rates at traditional savings institu-tions
are switching to higher- yieldin- g
stocks and money market certifi-cates,
he said.
But Thomas Baumgardner of Ed-ward
D. Jones and Co. resents the
accusation that his brokerage firm is
feeding on other financial institu-tions'
problems.
" To say that money is flowing out
of savings and into investment is an
unsubstantiated statement," he
says. " But we're so highly visible
that it's an easy statement to
make."
The fact remains that there is very
little mortgage money available
through Columbia's banks and sav-ings
and loan associations.
Boone County Bank dropped out of
the real estate lending market at the
beginning of the summer. St. Louis
Federal Savings and Loan's Colum-bia
branch also has temporarily sus-pended
construction and conventio-nal
mortgage lending. First National
Bank is not making construction
loans. All expect to resume construc-tion
and mortgage lending when in-terest
rates come down and more
money becomes available.
Farm and Home Savings and
Loan, Missouri's largest, is still tak-ing
FHA and VA loan applications,
but is finding few borrowers who
qualify because of restrictive stan-dards,
says Ken Engelbrecht of
Farm and Home's Columbia branch.
First Bank of Commerce is still
making construction and home
loans. The interest rate being quoted
is 20 to 22 percent on home loans, or
about one point above the current
ao percent prime rate.
Optimistic bankers, builders, real
estate agents and economists are
saying that the Economic Recovery
Tax Act signed by President Reagan
last Thursday could provide the
spark financial institutions and the
bousing industry desperately need.
" The tax break might do us some
good," Singleton said. " And if it
does, certainly it will be good for
housing, because that's the business
we're in."
The main way the tax bill could
benefit S& Ls and housing, he says, is
by providing new incentives for capi-tal
improvements in business. That
could provide the stabilizing element
the economy needs. Singleton says.
And the tax bill allows banks,
thrifts and credit unions to issue spe-cial
" All Savers" certificates that
pay 70 percent of the yield on one- ye- ar
Treasury bills. The certificates,
available for 15 months starting Oct.
1, would allow savers to earn up to
( See CERTIFICATES, Page 16A)
College of Agriculture to eliminate 50 positions
ByYouyuanliu
Missourian staff writer
To meet its $ 1 million budget re-duction,
the Agricultural Experi-ment
Station of the University Col-lege
of Agriculture will eliminate 50
to 55 positions and cut programs by
10 percent
The positions that probably will be
eliminated, according to Dean Max
Lennon, include' those of research
associates, technicians and assist-ants.
Even so, said Lennon, the target
budget is still not fully met. Addi-tional
reductions will be necessary,
including not filling vacant graduate
student assistantships and cutback
of feed production and livestock
herds.
Since agriculture is Missouri's
largest industry, and the farmers in
the state rely heavily on the college,
the impact of the cut will be felt
statewide, Lennon said.
" The farmers will undoubtedly
suffer, because we'll have to reduce
not only programs on the campus
but also at outlying centers," he
said.
Associate Dean William Pfander
said the college already is not re-sponding
to the needs of all farmers.
Insight
For example, he said, there are rice
and pecan growers in this state, but
the college has not done any re-search
on those crops.
A substantially reduced budget
will make the situation worse,
Pfander said. With research pro-grams
cut and personnel reduced,
" We are not going to be able even to
respond to some of the needs we are
now responding to."
Pfander said he expects a lot of
people to say " the University doesn't
do anything for me" and turn to oth-er
places for help.
The farmers have a system to col-lect
money to support research at
the college. But Pfander warns, " If
we have no people here to do the
work, they will go to Iowa, Kansas,
Arkansas or Illinois to get the work
done."
The potential impact of the cuts on
the state is difficult to evaluate accu-rately
at present, but not hard to
imagine. Pfander gave an example:
" We have a plant- breedi- ng project
that develops a new variety of wheat
which will out- yie- ld the existing va-rieties
by five bushels per acre. If
farmers plant 2 million acres
( 800,000 hectares) of the new variety
and get five bushels more per acre,
four dollars per bushel and assum-ing
an economic multiplier of three,
the impact of not doing this research
is $ 120 million per year."
The college's Agricultural Exten-sion
Service, which has an office in
each of the 114 Missouri counties,
faces a $ 200,000 budget reduction. Of
this, $ 142,333 will come from salary
and wages, said Thomas Brown, in-terim
dean for Extension and direc-tor
of the Agricultural Extension
Program.
To meet the reductions, Brown
said, " We simply are going to have
to eliminate six to seven positions."
In the short run he will not fill the
vacant positions left open by retire-ments
or by people who have re-signed
to take better- payin- g jobs
elsewhere.
But he added that these positions
are important and some of them
must be filled.
One such position is for a person to
work with small farmers; the Uni-versity
has the best program in the
nation in this area. Another position
is in soil and water conservation, a
( See BUDGET, Page 16A)
City weighs summer jobs plan
for disadvantaged " feenagers
By Jeff Baron
Mfcsouriaa staff writer
With federal and state govern-ments
cutting back on similar pro-grams,
the City Council may put
teenagers from low- inco- me families
in a summer employment program.
That was the major change the
council considered as it began re-viewing
the proposed city budget for
fiscal 1982 Tuesday night. Most coun-cil
members said they like the pro-posal,
which could take approxi-mately
$ 168,000 from the city's
surplus accounts to employ 150
youths, 15 supervisors and four coun-selors.
The council also reached a consen-sus
in support of a $ 10,000 Police De-partment
slush fund to pay infor-mants
and run undercover " sting"
operations. Police Chief David
Walsh said the department now
draws money from its narcotics in-vestigations
fund for those purposes.
The summer youth employment
program was the suggestion of City
4
Manager Richard Gray. He said the
proposal arose from a conference
with social service agency heads. " I
don't know where you could spend
this money better than stepping in
and helping these youths," Gray
said.
Under Gray's proposal, 150 youths
15 to 18 would work about 20 hours a
week for the city on maintenance
projects, and would spend another 10
hours learning about " job skills and
the work ethic." They would earn
$ 2.50 an hour and be supervised by 15
full- tim- e workers.
In addition, Gray recommended
hiring four " street counselors" to
spend six evenings a week meeting
teenagers and talking with them
wherever they spend time.
Gray said the size of the program
would be up to the council, and he
suggested 150 teenagers only as an
example.
If the council agrees to pay for the
program, Gray promised the city
will get the cooperation of the public
schools and social service agencies
to set it up. Wynna Elbert, the city's
director of youth services, would be
in charge of the project, Gray said.
The program is necessary " to help
fffl the void left by the retrenchment
of federal and state programs"
aimed at introducing low- inco- me
youths to the working world, Gray
said. He said it also could forestall
" a long hot summer next summer."
While council members gave some .
support to the idea of the youth em-ployment
program, they were more
enthusiastic about making it easier
for police to draw money to pay for
information.
Chief Walsh said the department
now has a $ 20,000 annual budget for
narcotics operations, but it also
draws from that account to try inno-vative
programs and to pay off infor-mants.
With more money, he said,
police could be more creative and
could run more undercover opera-tions.
Money for informants is not read-ily
available now, Walsh said.
Ira town
today
11: 39 ajn. Columbia Conven-tion
and Visitors Bureau meet-ing,
Hilton Inn, Stadium
Boulevard and Interstate 70.
Inside today
Hart transplant
Jim Hart is starting his 16th
season as quarterback for the
St. Louis Cardinals. He's had a
bright career but not bright
enough for hometown fans.
The 37- year-- old player will
have to do something special
to make those fans happy this
year. See story, page 10A.
Index
Business ........... 15A
Classified. 1- 4- C
Opinion 4A
Sports..... M.............. 10- ll- A
Theater ...... 13A
Weather 2A
Reagan believes deficit
will stay below 982 goal
LOS ANGELES ( UPI) Presi-dent
Reagan acknowledged Tuesday
he is having " budget problems" for
the coming fiscal year, but insisted
he will hold the 1382 deficit to the $ 42
billion consistently projected by his
administration.
The president met for nearly three
hours with top budget advisers,
mainly to discuss the defense bud-get.
Chief White House spokeman Da-vid
Gergen conceded there were " se-rious
threats" to the administra-tion's
1982 deficit goal. But Reagan
appeared to be more confident that
his administration can hold the line.
White House deputy press secre-tary
Larry Speakes reported that
budget director David Stockman told
Reagan during the meeting, " As far
as ' 82 is concerned, we're firmly on
target."
The president was asked during a
brief photo- takin- g session in his Los
Angeles hotel whether he is having
trouble keeping the 1982 deficit in the
$ 40 billion range.
" No we're not," Reagan said.
" Dave ( Stockman) tells me it's $ 42
V
billion."
Pressed as to whether his adminis-tration
is having problems fighting
the budget battle, Reagan said,
" You always have budget problems.
We've been having them for six
months."
But the president said he would
not try to save money by cutting sig-nificant
defense projects.
Reagan first called in Defense Sec-retary
Caspar Weinberger to look at
Pentagon spending long viewed as
the least likely place for cuts.
Also there were Secretary of State
Alexander Haig, Treasury Secretary
Donald Regan, Budget Director Da-vid
Stockman and Murray Weiden- bau- m,
chairman of the Council of
Economic Advisers.
Pentagon spokesman Henry Catto
said in Washington that Weinberger
strongly opposes any cuts in defense
spending.
There have been continuing re-ports
in the newspapers that the ad-ministration
faces a deficit in 192
that could run as high as $ 20 billion
above the $ 40 bfllion or $ 42 billion fig-ure
the president wants.
4